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Exchange Rate regimes, Political Parties, and the Inflation-Unemployment Tradeoff: Evidence From Greece

Author

Listed:
  • Lee, D.H.
  • Philippopoulos, A.

Abstract

We use Greek data during 1960-1994 to test and estimate a model in which wage inflation, price inflation and unemployment depend on the exchange rate regime, the identity of the political party in power and whether an election is expected to take place.

Suggested Citation

  • Lee, D.H. & Philippopoulos, A., 1997. "Exchange Rate regimes, Political Parties, and the Inflation-Unemployment Tradeoff: Evidence From Greece," Athens University of Economics and Business 97-05, Athens University of Economics and Business, Department of International and European Economic Studies.
    • Handle: RePEc:fth:athebu:97-05
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    1. Alesina, Alberto & Sachs, Jeffrey, 1988. "Political Parties and the Business Cycle in the United States, 1948-1984," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 20(1), pages 63-82, February.
    2. Kenneth Rogoff, 1985. "The Optimal Degree of Commitment to an Intermediate Monetary Target," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 100(4), pages 1169-1189.
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    5. Francesco Giavazzi & Marco Pagano, 1991. "The Advantage of Tying One's Hands: EMS Discipline and Central Bank Credibility," NBER Chapters, in: International Volatility and Economic Growth: The First Ten Years of The International Seminar on Macroeconomics, pages 303-330, National Bureau of Economic Research, Inc.
    6. Garfinkel, Michelle R & Glazer, Amihai, 1994. "Does Electoral Uncertainty Cause Economic Fluctuations?," American Economic Review, American Economic Association, vol. 84(2), pages 169-173, May.
    7. Alogoskoufis, George S & Lockwood, Ben & Philippopoulos, Apostolis, 1992. "Wage Inflation, Electoral Uncertainty and the Exchange Rate Regime: Theory and UK Evidence," Economic Journal, Royal Economic Society, vol. 102(415), pages 1370-1394, November.
    8. L. Wade, 1988. "Review," Public Choice, Springer, vol. 58(1), pages 99-100, July.
    9. Coles, Melvyn & Philippopoulos, Apostolis, 1997. "Are exchange rate bands better than fixed exchange rates? The imported credibility approach," Journal of International Economics, Elsevier, vol. 43(1-2), pages 133-153, August.
    10. Rogoff, Kenneth, 1985. "Can international monetary policy cooperation be counterproductive?," Journal of International Economics, Elsevier, vol. 18(3-4), pages 199-217, May.
    11. King, Robert G. & Plosser, Charles I. & Stock, James H. & Watson, Mark W., 1991. "Stochastic Trends and Economic Fluctuations," American Economic Review, American Economic Association, vol. 81(4), pages 819-840, September.
    12. Horn, Henrik & Persson, Torsten, 1988. "Exchange rate policy, wage formation and credibility," European Economic Review, Elsevier, vol. 32(8), pages 1621-1636, October.
    13. Francesco Giavazzi & Alberto Giovannini, 1987. "Models of the EMS: is Europe a Greater Deutschmark Area?," International Economic Association Series, in: Ralph C. Bryant & Richard Portes (ed.), Global Macroeconomics: Policy Conflict and Cooperation, chapter 7, pages 237-272, Palgrave Macmillan.
    14. Cukierman, Alex, 1994. "Central Bank Independence and Monetary Control," Economic Journal, Royal Economic Society, vol. 104(427), pages 1437-1448, November.
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    Citations

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    Cited by:

    1. Alogoskoufis, George, 2021. "Historical cycles of the economy of modern Greece from 1821 to the present," LSE Research Online Documents on Economics 109848, London School of Economics and Political Science, LSE Library.
    2. Alogoskoufis, George, 2023. "The twin deficits, monetary instability and debt crises in the history of modern Greece," LSE Research Online Documents on Economics 120344, London School of Economics and Political Science, LSE Library.
    3. Constantina Kottaridi & Mendez-Carbajo Diego & D. Thomakos Dimitrios, 2009. "Inflation Dynamics and the Cross-Sectional Distribution of Prices in the E.U. Periphery," Springer Books, in: Takashi Kamihigashi & Laixun Zhao (ed.), International Trade and Economic Dynamics, pages 449-475, Springer.
    4. George Alogoskoufis, 2019. "Greece and the Euro: A Mundellian Tragedy," GreeSE – Hellenic Observatory Papers on Greece and Southeast Europe 136, Hellenic Observatory, LSE.
    5. Alogoskoufis, George, 2023. "The state and the economy of modern Greece: key drivers from 1821 to the present," LSE Research Online Documents on Economics 118793, London School of Economics and Political Science, LSE Library.
    6. repec:rim:rimwps:43-07 is not listed on IDEAS

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    More about this item

    Keywords

    EXCHANGE RATE ; INFLATION ; BUSINESS CYCLES ; UNIT ROOTS;
    All these keywords.

    JEL classification:

    • E30 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - General (includes Measurement and Data)
    • E50 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - General
    • F30 - International Economics - - International Finance - - - General

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